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July 30, 2012 /PRNewswire/ -- Comstock Resources, Inc. ("
Comstock") (NYSE: CRK) and Kohlberg Kravis Roberts & Co L.P. (together with its affiliates, "KKR") today announced the signing of a definitive participation agreement providing for the participation of KKR in
Comstock's future development of its Eagle Ford shale acreage in
Wilson Counties in South Texas. Under the terms of the participation agreement, KKR will have the right to participate for one-third of
Comstock's working interest in wells drilled on
Comstock's 28,000 net acres in exchange for paying
$25,000 per acre through a drilling carry for the net acreage being acquired by KKR.
Comstock expects to ultimately develop most of its acreage based on spacing units of approximately 80 acres. The agreement will apply to wells spud by
Comstock on or subsequent to
March 31, 2012.
Comstock will retain all of its interest in wells spud prior to
March 31, 2012. Subject to certain conditions, KKR has committed to providing drilling carry equivalent to
$25,000 per acre for the next 100 wells drilled on
Comstock's Eagle Ford shale acreage and can continue to participate in additional wells drilled on the acreage for the same drilling carry.
M. Jay Allison,
Comstock's Chairman, President and Chief Executive Officer, commented, "We are excited to partner with KKR, one of the premier energy investment firms, in developing our leasehold in the Eagle Ford shale. This transaction will provide the capital necessary to accelerate drilling of this exciting oil play, while still allowing us to have the capital to develop our Wolfbone properties in
David Rockecharlie, Managing Director at KKR, said, "As an experienced participant in the early development of the Eagle Ford shale, we are excited to continue in the play's evolution by providing drilling capital for
Comstock's Eagle Ford position. We believe
Comstock has developed an attractive inventory of drilling locations, and we look forward to participating as a non-operating working interest partner."
KKR has been investing in the energy sector for more than 20 years, starting with its investment in Union Texas Petroleum in 1985. Providing drilling capital to strong operators by investing in oil and gas working interests at the asset level is just one of the many ways KKR is investing behind the oil and gas industry. KKR's Global Energy & Infrastructure business invests across the entire energy supply chain and multiple asset classes. Recent examples include the firm's acquisition of Samson Resources; numerous acquisitions for the KKR Natural Resources platform; a partnership with Premier Natural Resources to acquire producing oil and natural gas assets; and recently exited investments in East Resources, Hilcorp Resources and El Paso Midstream.